The Great Debate UK

BT must be more efficient


david-kuo_motley-foolthumbnail- David Kuo is director at The Motley Fool. The opinions expressed are his own.-

BT’s annual results were expected to be bad. It turns out that they weren’t just bad – they were awful.

Now, many of us were expecting massive losses, a slashing of dividends, the axing of jobs and a gaping hole in the company’s pension fund. And BT duly delivered on all fronts.

Thanks to a dreadful year from BT Global Services (which handles network services for large businesses), the company announced an annual loss of 134 million pounds after having taken a painful 1.3 billion pound write-down from that unit (a big chunk of which was due to a single IT contract with the NHS).  So they’ve taken the losses on the chin and got rid of the bosses.

Meanwhile, BT’s dividend has been at the forefront of many investors’ minds, with the company having enjoyed an enviable track record of steadily rising dividends since its crisis year of 2001. But fears were today realised with a near 60 percent cut. The full-year dividend has been slashed from last year’s 15.8 pence to just 6.5 pence.